This Op-Ed first appeared in The Australian 24 Sept 2012
In banning supertrawlers from our waters for two years, the Australian Government has sent a strong message to the bloated and subsidised European fishing industry.
Fishing in Europe is governed by the EU’s law on fishing, known as the Common Fisheries Policy. It has been a thirty year debacle of failed intervention by Brussels. The noble theory behind the CFP was to manage Europe’s fisheries in a fair and profitable way. But the reality has been a fiasco.
In one official paper, the EU described the CFP as “characterised by overfishing, fleet overcapacity, heavy subsidies, low economic resilience and a decline in the volume of fish caught by European fishermen”. The proof of the CFP’s dismal failure is in the water. According to the EU’s own grim scientific estimates, three quarters of the continent’s fish stocks are overfished.
The principal cause of Europe’s collapsing fish stocks is overcapacity. The EU fleet is simply too big. According to the European Commission, the EU fleet catches two to three times more fish than is sustainable within the continent’s waters. The problem then gets exported, with EU boats ending up in the waters of some of the poorest countries in the world, sending local fish stocks downhill.
Perversely, underpinning the overcapacity are massive EU subsidies, totalling well over one billion euros per year. In 2011, the EU Court of Financial Auditors produced a damning report, which noted that the multi-billion euro European Fisheries Fund designed to balance fishing activities at sustainable levels was actually doing the reverse. Grotesquely, European taxpayers are effectively paying fishermen to destroy the continent’s natural capital.
The EU state that benefits the most from subsidies is Spain – but the Dutch have also got in on the act. Parlevliet & Van der Plas, the company behind the super trawler at the centre of the recent controversy has been heavily favoured, receiving direct and indirect subsidies of more than €55 million in the last two decades. Subsidies appear critical to the business model of Parlevliet. Without subsidies, the firm may have even lost money in recent years.
According to the European Commission, between 30% and 40% of EU fishing fleet have negative long-term profitability, meaning that their income is not enough to cover all their expenses. The broader industry group to which Parlevliet belongs – the Pelagic Freezer-trawler Association representing some of the EU’s biggest distant water boats – would struggle to be profitable without subsidies.
Not all fisheries subsidies are bad. The WTO’s proposed disciplines on fisheries subsidies, for example, would still allow flexibilities for subsistence-type fishing in territorial waters. Administered appropriately, subsidies can also be an effective instrument in drawing down overcapacity. But at their worst subsidies hide and promote economic inefficiencies, lead to unsustainable fishing and distort politics. In Europe it is no surprise that countries and companies that have most feasted from the subsidies trough are among those that are most tenaciously opposing effective reform of the CFP.
In its 2008 Report, Sunken Billions: The Economic Justification for Fisheries Reform, the World Bank found the global marine capture fisheries sector to be an underperforming global asset with the difference between the potential and actual net economic benefits in the order of $50 billion per year. The Bank pointed to bad fisheries subsidies as being a big part of the problem and the EU is among the worst offenders.
The administration of the CFP subsidy system has also been associated with organised crime, undue influence and just plain incompetence. One study highlighted a number of instances where millions of euros were paid for ‘vessel modernisation’ and then more money was given for the same vessels to be scrapped a short time later.
European fishing overcapacity needs to be reduced and it makes economic, environmental and social sense to start with massive boats like the supertrawlers. As the United Nations Environment Programme has said, ‘given the wide difference in the catching power, the job creation potential, and the livelihood implications of large-scale versus small-scale fishing vessels, it appears that a reduction effort focused on large-scale vessels could reduce overcapacity at lower socio-economic costs to society.’
Progressive forces within the EU are currently trying to reform the CFP. The EU fisheries Commissioner Maria Damanaki has spoken repeatedly of the need for urgent reform as has the UK’s Conservative Fisheries Minister, Richard Benyon. Ranged against the subsidised vested interests, these reformers need all the help they can get.
David Ritter is the Chief Executive Officer of Greenpeace Australia Pacific.
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